CMS offers grants for state Medicaid system modernization

The Centers for Medicare and Medicaid Services will fund states a total of $150 million in 2007 and 2008 to design ways, including IT, to transform their Medicaid systems to increase quality and efficiency of care.

For example, states should look at methods to reduce patient error rates, such as through electronic health records, clinical-decision support tools or e-prescribing programs.

"With these grants, states can streamline and modernize their systems, stabilize the growth of the program and protect it into the future," said CMS administrator Mark McClellan this week in a statement.

CMS hopes that states will adopt innovative systems to get more value out of the money they spend providing health care to their citizens who are low-income elderly, children and those with disabilities. The Deficit Reduction Act of 2005 authorized funding for the transformation grants. States must apply by Sept. 15.

In addition to reducing patient errors, states should evaluate methods to:

• Reduce waste, fraud and abuse under Medicaid, such as reducing improper payments
  
• Improve coordination of care through care management programs to prevent duplicate services
  
• Implement performance-based payment programs to provide rewards and support for high-quality care and
  
• Implement a medication risk management program as part of a drug use review program.